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NEW DELHI: After infusing Rs 40,000 crore each in the past three months in Indian equities, foreign portfolio investors (FPIs) have slowed down the pace of inflows to Rs 12,262 crore in August on higher crude oil prices and resurfacing of inflation risks.
“FPIs are adopting a ‘wait and watch’ approach rather than making a U-turn. There continues to be uncertainty in the global economy and the underlying scenario is fast-changing. This will make the flows from FPIs volatile,” Himanshu Srivastava, associate director (manager research), Morningstar India, said.
This is the lowest investment in the last four months.
Srivastava attributed the slowdown in FPI investment in August to concerns on the global macroeconomic front, with higher crude oil prices and resurfacing of inflation risks.
Additionally, firming up of bond yields in the US would have also led some foreign investors to drift away from riskier markets in favour of greater certainty and better risk-reward profile offered by US treasuries, he said. Also, the intermittent rally in the Indian equity markets could have resulted in its valuation going beyond the comfort level of a few investors, he added.
“FPIs are adopting a ‘wait and watch’ approach rather than making a U-turn. There continues to be uncertainty in the global economy and the underlying scenario is fast-changing. This will make the flows from FPIs volatile,” Himanshu Srivastava, associate director (manager research), Morningstar India, said.
This is the lowest investment in the last four months.
Srivastava attributed the slowdown in FPI investment in August to concerns on the global macroeconomic front, with higher crude oil prices and resurfacing of inflation risks.
Additionally, firming up of bond yields in the US would have also led some foreign investors to drift away from riskier markets in favour of greater certainty and better risk-reward profile offered by US treasuries, he said. Also, the intermittent rally in the Indian equity markets could have resulted in its valuation going beyond the comfort level of a few investors, he added.
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